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Fake investment scam losses top $20m, ACCC warns

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Wed, 03 Aug 2022
Fake investment scam losses top $20m, ACCC warns
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In comparison with 82 reports in the first half of 2021, impostor bond investment scams have tripled in the first half of this year, which works out to be an increase by 265 per cent. The true losses to these scams are likely to be much higher according to Scamwatch, as research shows that only around 13 per cent of scam victims report their losses.

Delia Rickard, deputy chair of the Australian Competition and Consumer Commission (ACCC), has urged Australians to be very cautious when presented with investment opportunities.


"As interest rates rise, people looking to invest in bonds are falling victim to these scams after searching online for investment opportunities.

"This is often after they complete enquiry forms on fake third-party comparison websites.

"These comparison sites can appear very convincing, and people are providing their details under the impression that these are legitimate Australian sites comparing real financial services," Rickard warned.

More than half of those who reported losses to imposter bond scams were first contacted by phone, accounting for $11 million in losses.

"It’s critical to independently verify the financial institution or bank issuing the bonds by calling the bank or financial service directly, using details you have sourced yourself," according to Rickard, rather than using any phone numbers or links provided.

"If you seem to have been dealing with someone from the institution, ask to speak to them.

"Always have an accredited financial or legal advisor check any potential investment opportunity before you send any money or provide your credit card details and only ever invest as much as you can afford to lose," Rickard said.

Bonds can be purchased via the ASX, Rickard further explained, urging consumers to follow the Australian Securities and Investments Commission's (ASIC) safety advice.

"Convinced they are making a long-term, legitimate investment, it’s common for victims to deposit larger sums upfront and not check their account for months before realising they were scammed," Rickard said.

"Investment opportunities that promise a high return with little to no risk are likely to be a scam."

The ACCC shares investment scam reports with ASIC. The ACCC also shares scam reports with the financial sector through the Australian Financial Crimes Exchange and with platforms such as Facebook. Telephone numbers used by scammers to contact victims are also shared with telecommunications providers for potential blocking under the Reducing Scam Calls Code.

According to Scamwatch and the ACCC, victims of impostor bond scams are usually directed to transfer funds into a bank account, which are sometimes based in Australia.

Currently the ACCC is monitoring initiatives overseas and advocating for more scam-prevention measures in the financial system, including the UK’s requirements for Confirmation of Payee in the Authorised Push Payment Scams Contingent Reimbursement Model Code.

"If you have reason to believe you have been scammed, contact your bank or financial institution as soon as possible as they may be able to find where the money went, block scam accounts and help others to avoid sending money to scammers," Rickard said.

"If you have given away personal information, as most victims have, then also contact IDCARE as soon as possible.

"Equally, organisations that are aware they are regularly targeted by scammers impersonating them have an important role to play in the prevention of scams.

"Organisations should actively monitor for, warn about and promptly seek the removal of websites impersonating their brand," Rickard concluded.

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